The Select Family of Staffing Companies, one of the 10 largest staffing firms in the U.S., filed for a pre-packaged voluntary Chapter 11 bankruptcy after reaching a re-structuring deal. The Santa Barbara, California-based company says business will remain unaffected, and the move will significantly reduce its debt as well as provide additional capital to support current and future operations.

The $2 billion company was founded in 1985. It has a network of 312 offices in 48 states, with 75,000 full- and part-time employees and 1,500 corporate and franchise employees. Select had about 300,000 placements in accounting, finance and IT in 2013.

“We believe this reorganization significantly improves our capital structure and represents the best opportunity for Select Staffing to clear a path for future growth and long-term success in an efficient manner,” Select CEO and Chairman Steve Sorensen said in a statement.

“We believe this reorganization significantly improves our capital structure and represents the best opportunity for Select Staffing to clear a path for future growth and long-term success."

The company is currently owned by Sorensen, and family members. Once the $225 million in new equity is in place, the deal will leave the lenders with a majority stake in the company.

Decca Consulting, an oil and gas staffing firm now owned by Sorensen independently of Select, will also now be acquired by Select in the reorganization.

“Select is a solid company, generating strong operational and financial results, having achieved a record level of sales of more than $2 billion in 2013,” Sorensen added. “During this short reorganization process, we will continue to operate the business in the ordinary course, without disruption to our business partners. Specifically, all associates, colleagues, franchisees and vendors will continue to be paid on a prompt and timely basis, and our clients will still receive the same level of service to which they have been accustomed.”

The financial problems began with the economic downturn, and continued with a leveraged recapitalization according to this article in the Pacific Coast Business Times. At one point the company's debt reached a reported $535.5 million.

Sorensen stated in the Business Times interview, "I would not have signed up for this but you have to play the cards you have."

Tags: Staffing, News, Select Staffing bankruptcy, Chapter 11, KEYT-TV, Pacific Coast Business Times, D. Stephen Sorensen